I. SHORT TITLE: CHING V. QUEZON CITY SPORTS CLUB, INC.

II. FULL CASE TITLE: Catherine Ching, Lorenzo Ching, Laurence Ching, and Christine Ching,
versus. Quezon City Sports Club, Inc.; Members Of The Board Of Directors, namely: Antonio t.
Chua, Margaret Mary a. Modas, Alejandro g. Yabut, jr., Robert c. Gaw, Edgardo a. Ho, Romulo
d. Sales, Bienvenido alano, augusto e. Orosa, and the finance manager, lourdes ruth m. lopez, -
G.R. No. 200150. November 7, 2016. J. Leonardo- De Castro

III. TOPIC: Corporation Law - Non-Stock Corporations

IV. STATEMENT OF THE FACTS:

Respondent Club is a duly registered domestic corporation providing recreational activities,

sports facilities, and exclusive privileges and services to its members. Petitioner Catherine
became a member of respondent Club in 1989.

In 1999, the Respondent was ordered to pay monetary claims to six illegally dismissed
employees, by the NLRC. Such order became final and executory; hence, an alias writ of
execution of said judgment was served.

As respondent was not in a financial position to pay the monetary awards, the respondent BOD
issued a resolution entitled “Special Assessment for Club Member” , to seek assistance of its
members by assessing each member P2,500.00 payable in five (5) equal monthly payments.

Petitioner was notified of the special assessment, but argued that the imposition was unjust
and/or illegal; however, she took no action against the same. She simply avoided paying the
special assessment.

Thereafter, respondent BOD issued resolution which suspended the privileges of members of
Club, who had not yet paid the special assessment. Thus, when petitioner Laurence went to the
Club, respondent refused to accommodate petitioner because his mother’s membership had
been suspended.

To lift the suspension of Catherine’s membership privileges, she finally paid under protest the
special assessment of P2,500. Thereafter, respondent BOD issued a resolution to expel
petitioner Catherine as a member due to her filing of the civil suit against respondents.

V. STATEMENT OF THE CASE:

Petitioner filed a complaint for damages against respondents, based on Articles 19, 20, and 21
of the Civil Code.

The RTC ruled in favor of petitioner, because the respondent Club failed to comply with the By-
Laws when they suspended petitioner Catherine’s privileges, and they acted in bad faith.

On appeal, the CA reversed the RTC decision and found no bad faith on the part of the
respondents.

VI. ISSUE:
Whether or not the respondent club is liable for damages, when it suspended petitioner
Catherine’s membership privileges.

VII. RULING:

Yes, but liable only for nominal damages because petitioner’s right to due process was violated
as she was not afforded notice and hearing prior to the suspension.

As a rule, articles of incorporation and by-laws of a country club are the fundamental documents
governing the conduct of the corporate affairs of said club; they establish the norms of
procedure for exercising rights, and reflected the purposes and intentions of the incorporators.

Further, Bad faith does not simply connote bad judgment or negligence. It cannot be presumed.
It must be established by clear and convincing evidence.

VIII. DISPOSITIVE PORTION:

WHEREFORE, in view of the foregoing, the instant Petition is partly GRANTED. The Decision
dated June 27, 2011 of the Court of Appeals in C.A.-G.R. CV No. 92293 is REVERSED and
SET ASIDE. The respondent Quezon City Sports Club, Inc. is ORDERED to pay petitioners
Lorenzo Ching, Catherine Ching, Laurence Ching, and Christine Ching nominal damages in the
amount of P25,000.00.